diff --git a/app/helpers/application_helper.rb b/app/helpers/application_helper.rb
index e666e722ccb..dc9b699d907 100644
--- a/app/helpers/application_helper.rb
+++ b/app/helpers/application_helper.rb
@@ -233,7 +233,7 @@ module ApplicationHelper
   end
 
   def use_webpack?
-    if ENV['USE_WEBPACK'].present? && ENV['USE_WEBPACK'] != 'false' && ENV['USE_WEBPACK'] != 'False'
+    if CANVAS_WEBPACK
       !(params[:require_js])
     else
       params[:webpack]
diff --git a/config/initializers/webpack.rb b/config/initializers/webpack.rb
new file mode 100644
index 00000000000..178794b4cf6
--- /dev/null
+++ b/config/initializers/webpack.rb
@@ -0,0 +1,10 @@
+if !defined?(CANVAS_WEBPACK)
+  webpack_env_var = ENV['USE_WEBPACK']
+
+  if webpack_env_var.present?
+    CANVAS_WEBPACK = (webpack_env_var != 'false' && webpack_env_var != 'False')
+  else
+    webpack_file_path = Rails.root.join('config', "WEBPACK")
+    CANVAS_WEBPACK = File.exist?(webpack_file_path)
+  end
+end
diff --git a/doc/working_with_webpack.md b/doc/working_with_webpack.md
index c4777f5e980..f31355cb2ef 100644
--- a/doc/working_with_webpack.md
+++ b/doc/working_with_webpack.md
@@ -55,7 +55,9 @@ Webpack's output goes to "public/webpack-dist" for development js and
 
 The environment variable USE_WEBPACK is useful for trying out the assets
 that webpack builds locally.  If set to 'true', when you start your server
-you'll load JS from your webpack-dist directory rather than public/js.
+you'll load JS from your webpack-dist directory rather than public/js.  You
+can do the same thing by touching the file "config/WEBPACK" (if present, it's
+like having the USE_WEBPACK env var set).
 
 At any time you can use the url parameter "require_js=1" to get the requirejs
 version of the js instead so you can compare them side by side.
diff --git a/karma.conf.js b/karma.conf.js
index c7da12e6640..f9099d982fa 100644
--- a/karma.conf.js
+++ b/karma.conf.js
@@ -1,5 +1,20 @@
+var fs = require("fs");
 var karmaFiles = [];
-var usingWebpack = (process.env.USE_WEBPACK == 'True' || process.env.USE_WEBPACK == 'true');
+
+var webpackFileExists = false;
+var webpackFilePath = __dirname + "/config/WEBPACK";
+try {
+  fs.statSync(webpackFilePath);
+  webpackFileExists = true;
+}
+catch (e) {
+  console.log("no webpack file....")
+}
+
+var usingWebpack = (process.env.USE_WEBPACK == 'True' ||
+                    process.env.USE_WEBPACK == 'true' ||
+                    webpackFileExists);
+
 // If we're using webpack, we don't want to load all the requirejs stuff;
 if(usingWebpack){
   karmaFiles = [
diff --git a/lib/tasks/js.rake b/lib/tasks/js.rake
index aa94e4afcc2..f181afe566f 100644
--- a/lib/tasks/js.rake
+++ b/lib/tasks/js.rake
@@ -1,5 +1,6 @@
 require 'timeout'
 require 'json'
+require_relative "../../config/initializers/webpack"
 
 namespace :js do
 
@@ -70,7 +71,7 @@ namespace :js do
   desc 'test javascript specs with Karma'
   task :test, :reporter do |task, args|
     reporter = args[:reporter]
-    if ENV['USE_WEBPACK'].present? && ENV['USE_WEBPACK'] != 'false' && ENV['USE_WEBPACK'] != 'False'
+    if CANVAS_WEBPACK
       Rake::Task['i18n:generate_js'].invoke
       webpack_test_dir = Rails.root + "spec/javascripts/webpack"
       FileUtils.rm_rf(webpack_test_dir)
@@ -293,7 +294,7 @@ namespace :js do
 
   desc "build webpack js for production"
   task :webpack do
-    if ENV['USE_WEBPACK'].present? && ENV['USE_WEBPACK'] != 'false' && ENV['USE_WEBPACK'] != 'False'
+    if CANVAS_WEBPACK
       if ENV['RAILS_ENV'] == 'production'
         puts "--> Building PRODUCTION webpack bundles"
         `npm run webpack-production`
diff --git a/spec/selenium/i18n_js_spec.rb b/spec/selenium/i18n_js_spec.rb
index d72bd2f8849..5f548e09ac7 100644
--- a/spec/selenium/i18n_js_spec.rb
+++ b/spec/selenium/i18n_js_spec.rb
@@ -6,7 +6,7 @@ describe "i18n js" do
   before (:each) do
     course_with_teacher_logged_in
     get "/"
-    if ENV['USE_WEBPACK'].present? && ENV['USE_WEBPACK'] != 'false' && ENV['USE_WEBPACK'] != 'False'
+    if CANVAS_WEBPACK
       # I18n will already be exposed in webpack land
     else
       # get I18n and _ global for all the tests
@@ -59,7 +59,7 @@ describe "i18n js" do
       (I18n.available_locales - [:en]).each do |locale|
         exec_cs("I18n.locale = '#{locale}'")
         rb_value = I18n.t('dashboard.confirm.close', locale: locale)
-        js_value = if ENV['USE_WEBPACK'].present? && ENV['USE_WEBPACK'] != 'false' && ENV['USE_WEBPACK'] != 'False'
+        js_value = if CANVAS_WEBPACK
           driver.execute_script("return I18n.scoped('dashboard').t('confirm.close');")
         else
           require_exec('i18n!dashboard', "i18n.t('confirm.close')")